U.S. manufacturing activity contracts in November, prices decline: ISM
Yahoo Finance's Julie Hyman breaks down ISM manufacturing data and what it says about inflation in the U.S. economy.
Video Transcript
BRAD SMITH: But Julie, we've got some breaking news on the manufacturing front.
JULIE HYMAN: Yes, manufacturing contracting in the US for the first time going back to 2020, coming in at 49. Below 50 signals contraction, this from the Institute for Supply Management. 50.2 was the reading of the prior month. So it had been expanding, announcing that contraction. The prices paid component really catching my eye here, falling to 43 from 46.6 the prior month. 45.9 was estimated.
So the prices paid component coming down. Maybe keep an eye on that in terms of what it means for inflation. New orders weaker than estimated. And the employment part of that weaker than estimated, which is perhaps not surprising, again, given that ADP figure that we had, which showed a big drop in manufacturing employment here. So this is really interesting that we are seeing that.
The prices, by the way, that prices paid component down for the eighth straight month, but it is the weakest that we have seen. Input prices shrinking at the fastest pace since May of 2020. So all of this may be showing some good signs for inflation, not so good signs for the manufacturing sector itself. So we're going to keep an eye on that, but not really seeing much change in stocks as a result of these numbers.
